Tokyo, Nov 2 (IANS) The monetary base in Japan rose 17 percent in October from a year earlier from a 16.7 percent annual increase logged in the previous month, the Bank of Japan (BOJ) said in a report Wednesday.
The average daily balance of the monetary base stood at 115.64 trillion yen ($1.52 trillion) in October from 114.018 trillion yen logged a month earlier, the BOJ said.
Banknotes in circulation were up 2.6 percent on year, although coins in circulation remained flat in the recording period, the central bank’s report showed, reported Xinhua.
Japan’s monetary base refers to the amount of currency that is either circulated in the hands of people living in Japan or in domestic commercial bank deposits held in the central bank’s reserves.
This measure of the money supply typically only includes the most liquid currencies and the Japanese administration maintains a measure of control over the monetary base by buying and selling government bonds in the open market.
The central bank’s recent easing of monetary policies will likely facilitate an ongoing increase in Japan’s monetary monetary base.
An expansion in Japan’s monetary base is generally inflationary, as with October’s reading, while a decline will likely have the opposite effect.
